What Exactly Are Insurance Quotes? EXPLAINED
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What are insurance quotes?

SUMMARY

An insurance quote is an estimate of the amount of money an individual needs to pay in premiums to purchase their insurance policy. This estimate is made by the insurance company, and depends on information you provide to them and you can get a quote through an insurance agent, a broker, or an online brokerage. Choosing an insurance quote will depend on various factors like the coverage amount, the length of the coverage term, the price, and company reviews.

 

 

By Jiten Puri
CEO & Founder, Insurance Advisor, LLQP
8 min read
IN THIS ARTICLE

This may seem obvious, but if you wish to purchase insurance, you need to first get an insurance quote. But what are insurance quotes? And what types of insurance can you get quotes for?

An insurance quote is an estimate made by an insurance company of the amount of money an individual needs to pay in premiums to purchase their insurance policy. The quote depends upon the information you provide to the insurance provider. For instance, if you need to buy life insurance, you may have to provide information about your health and medical history. You can get quotes for many types of insurance, such as life insurance, critical illness insurance, disability insurance, home insurance, auto insurance, health insurance, and many more.

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How do you get an insurance quote?

You can receive an insurance quote through an insurance agent, a broker, or an online brokerage like PolicyAdvisor.

Getting quotes through an insurance agent

An insurance agent works at one particular insurance company. The agent generally provides information about different types of insurance plans available at that one specific company. Based on the information you provide, they may suggest the best insurance policy that meets your requirements from their limited pool of available plans and provide you quotes based on the policies which that company offers.

Getting quotes through an insurance broker

An insurance broker can help you find insurance quotes from multiple insurance providers (typically 2 or 3) and can present you with policy options dependent on your needs. While working with a traditional broker gives you more choice than finding quotes directly from a provider, you are still limited by the number of companies your chosen broker works with.

Getting quotes through an online broker

An online or digital insurance broker can save you time and money by presenting you with the most insurance quotes when searching for coverage. Brokers like PolicyAdvisor have access to policies from over 20 Canadian insurance providers and have tools that can help you narrow down your choices to the one that is best for you. And the best part? You can book some time with them instantly.

How do you choose between insurance quotes?

These are some of the factors that one should take into consideration while choosing an insurance quote:

  • Coverage Amount: This is the maximum amount that one can claim on their insurance policy. The concept differs between different types of policies, but generally, this is how much coverage one has.
  • Coverage Term: For life and living benefit insurance, this is how many years you are covered for; for other types of insurance like home and auto, your coverage renews every year.
  • Price: This may seem self-explanatory, but most Canadians compare their insurance quotes by price.
  • Company Reviews: There are many online reviews for insurance companies, which you can use to compare different providers. For instance, PolicyAdvisor provides reviews for term lifewhole life, and critical illness insurance.

Types of Insurance Quotes

As mentioned, there are many types of insurance available in Canada. Comparing and contrasting plans helps you make an informed decision.

Life insurance

Life insurance is an agreement between you and a life insurance provider, where if you die, they will pay a lump sum of tax-free money to someone you choose – also known as your beneficiary. In exchange, you agree to periodically pay your insurance provider a premium: a small amount of money over the lifetime of your policy.

In Canada, life insurance is broadly divided into two categories. They are term life insurance and permanent life insurance (which can be further divided into many other categories of life insurance).

When searching for life insurance quotes, one must first determine what kind of life insurance they need.

Term Life Insurance

Term life insurance is a type of life insurance product that covers you for a specified length of time, called a term, and pays a set amount to your beneficiaries if you die within the term. There are different term lengths (such as 10, 20, 25,30 years or up to age 65) available.

Term life insurance quotes are generally less expensive than permanent life insurance quotes.

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Permanent or Whole Life Insurance

Permanent life insurance (or whole life insurance) represents a category of life insurance products that provide lifetime insurance coverage. In other words, permanent insurance offers coverage until the policyholder passes away.

As the name suggests, permanent life insurance is best suited to protect ‘permanent’ or ‘lifelong’ needs such as estate tax liabilities, care for a disabled child or dependent, liquidity for closely-held businesses and even funeral expenses

Whole life insurance quotes are more expensive than term life insurance quotes but usually less expensive than universal life insurance quotes.

Universal Life Insurance

Universal life insurance is similar to whole life insurance, except there is a self-directed long term investment component. Your insurer gives you options for investing the cash value of your policy so it can be considered a way to save for retirement or provide you with other options for the value it accrues.

Universal life insurance quotes are generally the most expensive type of insurance quote because of this investment component.

Who needs quotes for life insurance?

Those with dependents need life insurance quotes. If you’re the sole bread-winner in your family or your dependents partly rely on your income, getting life insurance quotes and enacting a policy can help protect those you leave behind from significant financial obligations.

Those with outstanding loans or debts also need life insurance quotes. In a situation where you’ve taken a loan with a co-signer, getting life insurance quotes and enacting a policy can prevent that co-signer from taking on the responsibility of your outstanding financial obligations.

What affects quotes for life insurance?

Life insurance quotes depend upon an individual’s age, medical history, general health, vital statistics, smoking status, family history of illness, and more. All of these factors will affect the price of your quoted life insurance premium.

who needs insurance quotes

Critical Illness Insurance

Critical illness insurance can help protect an individual diagnosed with a serious medical condition by providing a lump-sum, tax-free payment to help them financially while they take the time to recover.

Who needs quotes for critical illness insurance?

Many Canadians can benefit from the protection critical illness insurance provides. If one worries about their quality-of-life after a health scare, how sickness could affect their family’s financial well-being, or having to work through an illness thus delaying or hampering their recovery, then they should consider getting a critical illness insurance quote.

What affects quotes for critical illness insurance?

Factors like age, health, medical illness history, and more will affect the quote for critical illness insurance premiums an individual receives from an insurance company.

Disability Insurance

Private disability insurance is for individuals who are not able to earn an income due to an injury or disability. Those who contract life-altering diseases can also benefit from the protection disability insurance provides.

Who needs quotes for disability insurance?

Professionals who rely on (or have dependents that rely on) their income should consider getting disability insurance. While many have some disability coverage in their workplace benefits, an individually owned policy can safeguard against events like switching workplaces.

What affects quotes for disability insurance?

Quotes can change based on age, health status and history, physical condition, occupation, the benefit period, and one’s current income. Some hazardous professions do not qualify for individually owned disability insurance.

Home Insurance

Home insurance protects you from the financial costs of repairing your home due to damage, fire, and other disasters and occurrences. Home contents insurance also safeguards you against the financial cost of replacing stolen items in your home.

Who needs home insurance quotes?

Home insurance is essential for every homeowner and is generally required by law. Those who rent their homes can still get quotes for tenant’s insurance to protect themselves against damage or theft of their property inside the home.

What affects home insurance quotes?

Home insurance quotes vary depending upon one’s location. For instance, the risk of flooding or other natural disasters in a particular area will influence quotes. Other factors like a home’s age, size, the type of heating used, building materials, and more can affect the price of quotes.

Auto Insurance

Auto insurance enables an individual to safeguard themselves from the financial impacts of car accidents, damage, or theft. Auto insurance is mandatory in Canada.

What affects auto/car insurance quotes?

The price of a car insurance quote is affected by driving history, location, age of the vehicle, vehicle model, the number of drivers, whether you own winter tires, and other factors. 

The information and views provided herein is for general informational purposes only and should not be considered legal or financial advice.

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KEY TAKEAWAYS

  • You can get an insurance quote through an insurance agent or an in-person or online insurance broker, and your quote will be determined by the information that you give to your insurance provider. 
  • Common factors to consider when choose a quote are coverage amount, coverage term, and company reviews.  

By Jiten Puri
CEO & Founder, Insurance Advisor, LLQP

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